The Indian IT industry, which has been steadily growing over the last two decades by providing low-cost IT services to western companies, faces uncertain times in the near term.
Slowdown in 2012
Analysts see all four major technology sectors computing hardware, enterprise software, IT services and telecommunications equipment and services experiencing slower growth in 2012.
IT market researcher Gartner has revised downward its outlook for 2012 global IT spending from its previous forecast of 4.6% growth to 3.9%.
IT services, on which Indians rely for their entire business, will see a severe hit.
Compared to an estimated growth of 6.9% in 2011, the growth projection for IT services in 2012 is just 3.1%.
The projected slowdown in IT services growth combined with the tightening on issue of H1 and L1 Visas that Indian companies rely a lot to do their work in America could mean hard times ahead.
The slowdown will also intensify the battle between the big Indian firms like Infosys, Wipro and TCS for business and potentially affect the rates they charge.
All in all, 2012 does not look like a good year for the code monkeys sitting in the cubicles of Noida, Pune, Bangalore, Chennai and Hyderabad or for the share prices of the Indian IT companies.